Unemployment (Underemployment): How Is It Shaping The Future?

You don’t need to wait for the next jobs report in the USA or Europe, to realize there’s something inherently wrong with the job market. With unemployment soaring above 20% in some countries, it’s very hard not to ponder about what’s going on. However, the numbers ( high or low) don’t always reveal the whole the story.

Contrary to what the US and German governments would have you believe, things aren’t getting much better –or at least not fast enough. Take Germany’s example, a juggernaut economy proud to state that it has the lowest general unemployment rate (under 6%) within the Euro zone. Sounds good doesn’t it? Unfortunately, after closer inspection, and for the first time in decades, it appears that the harsh reality is that the future is not presently being considered.

No matter where you look unemployment seems to be a youth issue.

The recession hit young people, especially graduates, the hardest. Millions of youngsters are out of the job market or, equally worse, underemployed. In fact, many are suffocated with student loans they are unable to repay. According to The Economist, about 290 million people between the ages of 15-24, are unemployed or employed in sectors not related to their concentration or capacities.

The Blame Game

After several years of expansive growth the financial bubble (and several other bubbles) burst. As a result, growth stalled and a prosperous economic cycle was brought to its knees. The ripple effect of the financial crisis affected every section of the globe. Globalization connects everyone on the planet; thus, everyone felt the punch. Six years into the recession, governments are facing sluggish growth and through harsh austerity policies.

Meanwhile on the other side of the spectrum, things couldn’t be more different. Companies are still hoarding massive amounts of cash and becoming less risk oriented. This is never more evident than when companies choose experience over education. Hiring a person with little to no experience implies a greater risk, one that requires time and money. However, the crawling economy is not the only culprit for the high levels of youth unemployment. There is a dissonance between the career paths chosen by Gen Y and the reality of the workforce. How many English, Liberal Arts and Sociology majors does a country need? I have great respect for everyone who pursues their passion, but I do wonder at times if one should consider usefulness over passion. Unfortunately everyone is bound to the reality of having to earn a living, which is not always aligned with one’s personal interests.

Each generation has unique situations that profoundly impact their lives, career decisions etc.; aspects that will be carried on for years to come. With such a high number of the future unemployed/underemployed, what will the next 30 years look like? What will retirement mean for Gen Y? One thing can be assumed: the way we enjoy and envision certain aspects of life like college, retirement or work, will vary significantly from today’s definition and expectations. For instance, in one of their skits The Daily Show pundits make light of the current value of college and try to prevent people from entering careers with no future. College is no longer seen as the gateway to the acquisition of social mobility. Not because education isn’t necessary, but because the current education system is immensely flawed and is not in tune with the economic and social zeitgeist. Education became a profitable business that long ago forgot its mandate of usefulness and relevance. Unless things change for the better I doubt future generations will continue to ‘invest’ in higher education.

Retirement is another example. Can Gen Y afford to retire? In direct contradiction to practices of the past, Gen Y is already unfashionably late to the employment party. Crushed by debt and low asset ownership it doesn’t seem like life will begin in earnest for Gen Y anytime soon. Current trends suggest that consumer spending will not be the driver of growth and innovation for the future. Companies and government be aware! Forcing consumer spending is not a sustainable long term solution.

It’s not just the future that is in jeopardy because the present continues to crumble before our very eyes. High unemployment contributes to poverty and poverty fuels radicalization and extremism, especially in terms of immigration-the fallacy that foreigners take jobs from locals and devalue wages. Such views have even reignited the debate of racial supremacy. It is no coincidence that a neo-Nazi controls 10% of the parliament in Greece and anarchy reigns supreme. Radical groups with their own agendas have always taken advantage of the hopelessness of the masses. Today these social parasites have uncovered a new niche for the aggrandizement of their flawed ideals by preying on disenfranchised youths that are looking for someone to blame and any cause to give their lives meaning.

I predict that life will be significantly different for the next 30 years. The rioting and demonstrations will continue unabated if things don’t change. As such, companies should lose their fears of hiring youngsters and rather use this as an opportunity to cultivate and mold talent in accordance with corporate needs. On the other side, Gen Y should drive innovation and discover new ways of doing things. It cannot (and should not) be content with the status quo. It’s time Gen Y stops living under the shadows of Gen X and Baby Boomers and starts writing its own rules towards progress.

“The great Mother, Of all productions (grave Necessity).”

George Chapman The Conspiracy and Tragedy of Charles, Duke of Byron, 1608.